Darcy Bomford, CEO of True Leaf, with his dogs (source)
Today, True Leaf Medicine International Ltd. (CSE: MJ; Germany: TLA; WKN: A14NM1) announced to have exclusively secured production capacities from existing pet food manufacturer, Wodema Industries Ltd. Additionally, True Leaf owns the right of first refusal to acquire all production facilities from Kelowna, BC-based Wodema.
On April 9, we reported on True Leafs plans to enter the pet food industry in fall 2015 with a hemp-based pet product line. Less than a month later, True Leaf surprises positively with this potential company-making transaction, as it is now getting down to business to enter this $53 billion market.
The success story of Naturally Splendid Enterprises Ltd. has shown how lucrative it can be to enter the hemp-based pet food market (its stock rose 5-fold within few weeks and enjoys a market capitalization of $32 million CAD). True Leaf, with its 38 million shares in the market, has a current market valuation of $3 million CAD only. For such reasons, Rockstone Research will publish a detailed initiating coverage on True Leaf and the market for hemp and cannabis in Canada and USA shortly; as it became tangible today that the company has best chances for success.
The clou of todays press release: True Leaf does not need to handle a multi-mullion-dollar transaction to take over an existing producer. It is likely that the company will initially take over production capacities from Wodema and as and when required (probably after the launch of its new product line) will acquire Wodemas production facilities.
True Leafs CEO, Darcy Bomford, has 30 years experience in the pet food business, which probably made today`s transaction possible. Another high-carat personality in True Leafs team is chairman Michael Harcourt, former premier of British Columbia and mayor of Vancouver.
The well-known magazine Business Vancouver wrote an article on True Leafs plans to enter the pet food industry on April 13. On April 15, the well-established medical marijuana analyst, Chris Parry, conducted a readworthy interview with Darcy Bomford.
Consumer demand for pet food, health and wellness products, grooming and pet related accessories is growing at a rate of 4% annually. The overall market in Canada for pet related items is expected to grow to $8.3 billion by 2018. According to True Leaf, the pet medication industry is worth $13 billion. Some 156 million dogs and cats live in America. The medical benefits of hemp-based supplements are increasingly recognized especially in North America. Not only old dogs and cats are suffering from painful and inflammatory arthritis, whereas hemp is said to safely provide painkilling and anti-inflammatory properties (without making animals high).
True Leaf is well on track to develop marketable pet food products that can be sold immediately in fall 2015 to generate cash flow as the regulations for hemp-based products (without THC) are not as strict as being the case with marijuana/cannabis (THC-rich) products, for which a licence is necessary. Appropiate newsflow during the next weeks is expected to have a positive impact on True Leafs market valuation as only few publicly listed companies, which aim at establishing themselves in Canadas medical marijuana market, have a serious focus on the hemp-based pet food industry. This focus may turn out as a company-making event for True Leaf generating regular cash flow, whereas the company represents the potential to penetrate this market early and advancing to a market leader in this growing health segment.
Furthermore, True Leaf has filed an application under Health Canadas Marihuana for Medicinal Purposes Regulations (MMPR) to become a licensed producer with a facility located in the Village of Lumby, BC. The company has passed through the preliminary and enhanced screening process of Health Canadas review and is currently awaiting a ready-to-build approval.
We continue to comply with the Health Canada application review process and have responded to eight Health Canada Requests for Additional Information to date. This initiative strategically addresses both our immediate, short-term need to establish brand and revenue while we wait for the outcome of our MMPR application to Health Canada, and helps define our long-term mission as the Quality of Life Company for both people and their pets, said Mr. Bomford.
Further investor information on True Leaf:
The author, Stephan Bogner (Dipl. Kfm., FH), owns shares of True Leaf Medicine International Ltd. and thus would profit from a share price appreciation, whereas the author may sell those any time without notice. Neither Rockstone Research nor the author was remunerated or instructed by True Leaf Medicine International Ltd. to produce or publish this content. However, please read the full disclaimer on www.rockstone-research.com as a conflict of interest exists with Zimtu Capital Corp. and none of this content is to be construed as a "financial analysis" or "investment advice".